It is a legislative requirement that financial statements should present a ' true and fair' view. However, the concept has brought considerable debate on its meaning since no authoritative definition of the phrase has been given from relative authorities. Lawyers treat the phrase as a legal concept and interpret the phrase by its ordinary meaning. In contrast to lawyers, accounting professions argue that the ‘true and fair' concept is an accounting concept and has a 'technical meaning'.

It is submitted that no matter how often the debate occurs regarding the meaning of a 'true and fair view', there is never likely to be a consensus of opinion as to its meaning.

Despite these conflicting views on the concept, recent amendments to the Australian Corporations Law replace the allowance of the TFV overriding with requirements of full compliance with accounting standards. The amendments were thought to have potential impacts on the position of the 'true and fair' requirement in financial statements.

As showing TFV financial reports is of critical importance for investment communities, the objectives of this research are to analyse the real meaning of the TFV concept and the possible repercussions of the recent amendments to the meaning of the concept and to the investment public.

An empirical questionnaire survey was conducted in this research to examine the operational meaning of the phrase perceived by the Australian large audit firms. The survey results indicate that the audit firms prefer footnote disclosures in financial statements than departure from accounting standards to prevent users of financial reports from being misled. Therefore, the audit firms do not think the recent legislative amendments obstruct financial statements in showing a TFV.

In the author's opinion, the amendments exist mainly for the benefit of auditors and directors by clarifying their duties, and the information content of financial statements could be impaired for the investment public due to the form-over-substance financial reports.

However, the effects of the legislative amendments have not had the time to surface, so its full repercussions are not yet to be determined.